Live Events: Government-backed Insurance

Bob Seely Excerpts

Tuesday 23rd March 2021 Westminster Hall

[Bob Seely (Isle of Wight) (Con) [V]]

It is a pleasure to serve under your chairmanship, Mr Rosindell. It is also a pleasure to follow the hon. Member for Richmond Park (Sarah Olney). I agree with one of the critical points that she made, which is about people involved in the arts, and support to the arts, having fared particularly badly in this pandemic. That has been an issue of real regret.

I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), my hon. Friend the Member for Winchester (Steve Brine) and the hon. Member for Cardiff West (Kevin Brennan) for leading this debate, and I agree very strongly with the points they made. I will not speak for too long, because I just want to echo some of those points, specifically in relation to festivals on the Isle of Wight.

The Isle of Wight is effectively Britain’s festival island; we are home to a new festival almost every weekend, over and above the significant, major festivals that we have hosted, such as the Isle of Wight festival and Cowes Week, which is the biggest sailing event in the world. Festivals contribute significant value to the island’s economy, although their value is wider than just economic. They support extensive supply chains, local businesses, equipment hire and similar areas of the economy. They also support the island’s visitor economy, such as shops, bars, restaurants and accommodation, and they also help local farmers to diversify their incomes. The funding and spend of almost all the smaller independent festivals also go directly into the local economy, employing hundreds, if not thousands, of people. As well as an economic impact, they also have a significant cultural impact on the island.

As has been pointed out, festivals are year-long endeavours; as soon as one festival is finished, those involved are already planning next year. A year’s worth of effort goes into something that is mostly only a weekend long. While other elements of the hospitality industry, such as pubs and restaurants, can turn off and on during lockdown—however inconvenient that is—it has been very difficult for the festival and arts industries to do that.

The hon. Member for Cardiff West eloquently explained why Government-backed insurance—pooled reinsurance, to use the term that was used in the IRA days—is a very good idea, and I fully support it. Given the long lead times, we need to help, and we need to give confidence to festival organisers, so that they know that their work will not be wasted. It is likely that festivals will be able to go ahead this summer, with all the new mitigations in place around testing and the vaccination process, so I do not quite understand why we cannot have a pooled reinsurance scheme, which could be relatively cheap but help to kickstart this element of our arts and entertainment industry.

What concerns me is that every day we are in lockdown, it costs us a minimum of half a billion pounds in lost economic output and cost to the Treasury. If we can come out of lockdown only a few days earlier, we could be billions of pounds better off. A very small percentage of that money could be used to provide a scheme of pooled reinsurance for festivals—not only on the Isle of Wight, but across Britain. As everybody who has spoken in the debate has said, we need those festivals for people’s mental health and for the enjoyment of arts, culture and music, including the music festivals that we have on the Island. We badly need those in our lives again, because we have missed them in the last year. As well as helping our economy, they enrich our souls.

I hope very much that the Minister, who I know is absolutely passionate about her role, can see her way to working on the Treasury a bit harder, so that we can have some kind of pooled reinsurance scheme to support all the great festival businesses and all the jobs that they support on the Isle of Wight and throughout the United Kingdom.

Telecommunications (Security) Bill

Bob Seely Excerpts

2nd reading & 2nd reading: House of Commons & Carry-over motion & Carry-over motion: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Monday 30th November 2020 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

It is a pleasure to follow my hon. Friend the Member for Wantage (David Johnston). I noticed that he was speaking without notes, which was very impressive. Sadly, I still rely on mine. I thank the Minister for bringing forward the Bill, and I thank the ministerial team for talking to us and engaging with so many colleagues. It would be great if other Departments could do that. What can I say? Hint, hint!

When the Henry Jackson Society and I produced our “Defending our Data” document back in May 2019, many Members had yet to form an opinion on Huawei. I am therefore grateful to the 60-odd members of the Huawei interest group who took an interest in this subject, and to the 36 people who voted to show their concern to the Government back in early March on the Telecommunications Infrastructure (Leasehold Property) Bill. I am aware that that Bill was not necessarily the right place to express those concerns, but with hindsight I think it sent an important message to the Government from those 36 Members—plus two tellers, of whom I was one. The United States moving its position in subsequent months was also important. I think the change would have happened anyway, regardless of whether there was a Republican or a Democrat Administration. A combination of Back-Bench concern, quite rightly, and the United States’ understanding of the geopolitics being perhaps a little ahead of that of the United Kingdom and on a par with that of Australia helped to shape Ministers’ understanding of the problems.

I am slightly concerned that the situation came to this in the first place, because there were so many warning lights about Huawei’s deepening relationship with BT. My hon. Friend the Member for Totnes (Anthony Mangnall) spoke about Nortel. We must remember that Huawei had a supply contract with Nortel, during which time it hacked its way into Nortel’s systems and stole everything, like a parasite within a body. Nortel was one of the great, spectacular Canadian bankruptcies of the early 21st century. Why? Because it went into partnership with a business that deliberately collapsed it after stealing its IP. If that is not a lesson for us, it is difficult to know what is. Huawei never was and never will be a private firm. It is 99% owned by the Chinese state via trade unions. When I heard Ministers—not this Minister, but others—using the line about Huawei being a private company, I felt that it was a deeply naive thing for the Department to say.

[Dr Julian Lewis]

Just for the record, a former Prime Minister said that as well, repeatedly.

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[Bob Seely]

It was very concerning that those who govern us were calling a part and parcel of the Chinese state a private firm, which it clearly was not.

The Government claimed that Huawei could be safely limited to the periphery of the network. That is a dubious argument that is still being debated and is not believed by many experts in many other countries. Were there espionage issues with Huawei? Well, as my hon. Friend the Member for Wantage said, we do not expect a state threat to come from Sweden or Finland. But we do expect a potential threat to come from one-party totalitarian states such as China, Russia, Iran and North Korea. China is clearly one of those. So the Nortel example was a good one.

As we know, China has a dreadful reputation for intellectual property theft and cyber-attacks, so there were many reasons to be deeply concerned about what was happening in our relationship with Huawei. Yet at the same time it became incredibly powerful in this country. Why? Because it had a very aggressive lobbying network. It was throwing money at lobbyists and senior people who used to be at the heart of Government, at very senior levels. This really concerns me about the state of our democracy, and it is one reason that I would like to bring in a foreign lobbying Act. We need to have a much clearer idea of what those companies or oligarchs—those who act on behalf of other people and states—are up to in this country. We did not really know the extent of the Huawei lobbying operation.

[Sir John Hayes]

My hon. Friend is painting a picture of a strategic view of China and other powers that has prevailed under successive Governments. It is born of a kind of determinism: “We can’t stop them, so we’ll have to live with them”. There is a predetermined inevitability about the domination of these states, and that is a misconception that needs to be challenged fundamentally, in the way in which he is doing so tonight.

[Bob Seely]

I look forward to being as eloquent and well dressed as my right hon. Friend one day. Before I come to the point that he mentioned on the need for a consistent approach and better understanding, let me say one more thing about Huawei.

A few other Members have touched on this matter: China’s human rights issues. The excellent Australian Strategic Policy Institute has presented credible evidence of significant human rights forced labour issues, with people from Xinjiang province being used not only by Huawei, but by other significant Chinese firms, or by firms producing goods for western consumer markets and western branded goods. This point brings us to the National Security and Investment Bill—although I know that we are not talking about that at the moment—and the need for a definition not only of national security, but of national interest as well. Do we really think it is in our national interest for us to be accepting slave labour products in this country, whether through Huawei—allegedly—or other firms, including well-known branded names? That human rights aspect is well worth playing up.

It seems clear that the China that we had all hoped for —indeed, the golden era that we were meant to welcome under David Cameron and George Osborne—is not the China that we are getting. We need to be realistic. When it comes to international relations, in the west we are effectively liberal internationalists. We take a positive view of humanity—maybe a liberal, rather than a conservative one, if one is being philosophical about these things, but a benign view of humanity. That is not necessarily shared by the hard-nosed realism school of thought that we see in Russia and China, which is much more of a zero-sum game: we win, you lose. China plays that more subtly than Russia, but there are enough similarities between the two that it should be of concern to us. We need a clearer understand that some people out there with whom we do business do not necessarily wish us well and do not wish our values well. Finally on that, we are stumbling towards that understanding, but we need a more consistent approach to how we deal with China, along the same lines of how we deal with Russia.  They are not the same—they are very different—but we have been forced to take a more consistent understanding of the Russian threat, and we need to do the same with China.

I congratulate the Minister on his work on the Bill. The “no new install” date is the key now, and that is why everyone is on side with the Bill. We need that September date, because it shuts down any alternatives for Huawei in the short term. We need a consistent approach, whether it is the Huawei Bill or the National Security and Investment Bill, across Government. This is one of the very small number of truly significant policy packages that we will have to get right in this country for the 21st century.

There are two choices for humanity this century. We can go down our route of open, broadly tolerant societies where people control their Governments—that free open model—or there is the closed model of totalitarian or one-party states, which are building up, with Huawei’s help, this Orwellian state, where the state knows what you are thinking before you do. That is not a good avenue for humanity to go down and, without being antagonistic and too hostile to other people, we need to defend our version of the future of humanity with a little more resolve.

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[Matt Warman]

As I said earlier, we would want to apply those standards not just to telecoms companies but to the garment industry and in a host of other areas where we know that there is the potential for similar abuses. I absolutely hear what my right hon. Friend says, but Britain can do better than focus simply on the relatively narrow aspect of telecoms.

[Bob Seely]

I hear what the Minister is saying, but I wish to follow up the point made by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). If the debate on this Bill is not the place to discuss human rights, I get that, but we are also told that the debates on the National Security and Investment Bill are not the place to discuss human rights. I may get that as well, but the Government need to say where significant national interest concerns that are outside national security can be addressed. We talk the talk on human rights an awful lot in this country and this Parliament, but we have to put some trousers on that, I think.

[Matt Warman]

I am not going to engage too heavily with my hon. Friend’s trousers, but I will say to him that, as I said a minute ago, we are committed to taking forward an ambitious package of changes to strengthen and future-proof the Modern Slavery Act 2015, and that is one of several significant avenues that are open to him.

On the important matter of diversification, the telecoms supply chain review asked how we can create sustainable diversity in our telecoms supply chain. That question is addressed by the new diversification strategy that we published today, which is crucial to ensuring that we are never again in a situation in which we are dependent on just a handful of vendors who supply the networks on which so many of us have come to depend. I wish to spend a little time on this issue. The Government have been working at pace to develop the 5G supply chain diversification strategy, which sets out a clear vision for a healthy, competitive and diverse supply market for telecoms and the set of principles that we want operators and suppliers to follow.

The strategy is built around three key strands: first, securing incumbents; secondly, attracting new suppliers; and thirdly, accelerating the development and adoption of open and interoperable technologies across the market. That is why, in the diversification strategy that we published today, we commit to exploring commercial incentives for new market entrants as we level the playing field; to setting out a road map to end the provision of older legacy technologies that create obstacles for new suppliers; and to investing in R&D to grow a vibrant and thriving telecoms ecosystem here in the UK.

I say gently to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) that we have directly addressed a number of the issues that she raised in Westminster Hall last week. I look forward to engaging with her more on the strategy because it is important that we should work together to try to make sure that we all derive the benefits of a serious £250 million Government commitment that will drive early progress and ensure that our 5G diversification strategy not only bolsters the resilience and security of our digital infrastructure but creates opportunities for competition, innovation and prosperity.

Tourism: Covid-19

Bob Seely Excerpts

Thursday 10th September 2020 Commons Chamber

[Selaine Saxby]

I thank the hon. Gentleman for that intervention.

The pandemic has indeed shone a light into many of our economic sectors, highlighting the interconnectivity of so many activities. Indeed, the plight of the aviation sector—the subject of our previous debate—is inextricably linked to the overseas visitors who are most notable by their absence this summer. We need no statistics to know that for many of us here, it is far easier to get across Westminster Bridge now, without having to navigate through crowds of tourists. Overseas visitors normally spend in excess of £28 billion each year visiting our fantastic tourist destinations—more than our normal domestic tourism expenditure. That should start alarm bells ringing about the current situation in our tourism sector.

In Devon, we see over 35 million visitors a year; 11% of the population across the entire county are employed in tourism, and the proportion is much higher in some Devonian constituencies such as mine. Devon alone estimates its tourism turnover to be down by £1.3 billion this year; nationally, the estimate is over £68 billion. I remember with alarming clarity, as we went into lockdown, despite my self-appointed role as the one-woman tourist board for North Devon in Westminster, calling for my tourism businesses to close their doors. Over 80% of tourism businesses closed, versus 24% of businesses overall; 75% of tourism employees have been furloughed, versus 27% of the working population. The sector was late to reopen, of course, and in many cases has not been able to open even to 50%.

Many sectors have had a difficult summer, and focusing on tourism in this debate is not to belittle the difficult experiences of others. Tourism has seen something of a resurgence, and the sun has come out this summer for some in the industry, much helped by the eat out to help out scheme. Self-catering and holiday parks have reported some great results, and forward bookings look robust. However, as I keep reminding people, winter really does not start until January in Devon. A stormy day at the seaside is worth travelling for, in its own way. I recall with great affection, as a child with my father, getting a soaking at high tide from a huge rogue wave, and I have enjoyed watching a few roar across the Atlantic coast outside my window, even during this summer recess.

Positivity is something we can bring to this debate, and I thank colleagues in all parts of the House who have visited my North Devon constituency this summer. We all have a role to play in boosting our tourist economies by encouraging visitors to come and see what many may have forgotten a British holiday has to offer. After being cooped up for months, the pandemic has reminded many of us of the benefits of wide open spaces, and our beaches and moors have seen huge influxes of visitors; our city and town centres, however, have not. Indoor attractions continue to struggle to approach break-even with social distancing, not to mention the plight of the coach industry, conference and exhibition venues, tour operators, airlines and, unfortunately, many more businesses.

The tourism industry was in good shape before the pandemic, with annual growth over the past five years exceeding 4%; however, it remained plagued by low productivity, with a transient temporary workforce. Because of the nature of those working in it—from young people working a summer job to migrants trying to make ends meet—high staff turnover has hampered the growth of the sector. Hopefully, initiatives such as T-levels and apprenticeships will help more young people to see tourism as a career option and not just a summer job.

The cut in VAT will enable more small independent tourist businesses to stay open into the winter. Many in the industry were campaigning for a VAT cut long before the pandemic, to encourage coastal communities to extend their tourism season rather than close their doors for the winter. Perhaps that VAT remaining in place longer is what we need to help the industry to respond and rebuild.

[Bob Seely (Isle of Wight) (Con)]

I know that the Minister—an excellent Minister—is listening carefully. I think that we can all agree that the longer the 5% VAT reduction is kept in place, the more we can sustain and develop our tourism economies as we go into the years ahead.

UK Telecommunications

Bob Seely Excerpts

Tuesday 14th July 2020 Commons Chamber

[Oliver Dowden]

The right hon. Gentleman is right to highlight the wider risks to the network. As I have said repeatedly, both previously and today, we would be exceptionally naive to think that just by removing Huawei, we remove that risk. Sophisticated hostile state actors can of course infiltrate our networks. That is why we are toughening up considerably the security of our networks through the telecoms security Bill, and I think that is the correct approach.

[Bob Seely (Isle of Wight) (Con)]

I welcome much of what the Minister has said and am grateful to him for coming here. This does look like a long, slow goodbye to Huawei, but does he understand the concerns of some Members that seven years is a very long time in politics and it would be better were it to be done sooner? Also, does he understand that perhaps the lesson from all this is that for a host of reasons—economic, security, geopolitics —high-risk vendors should not be in our critical national infrastructure?

[Oliver Dowden]

I thank my hon. Friend for his constructive comments. I genuinely understand the concerns about speed expressed by him and other Members. That point was considered extensively by the National Security Council, and in the end we made a balanced judgment. We believe that by having 2027 as the target, by the end of this Parliament we will have put in law an irreversible process for removal. The risk of going faster relates to the integrity of the network and the challenges in that respect. I would rather we got to a point where we had got it out completely by 2027, and I think that is a realistic timetable for doing so.

Telecommunications Infrastructure (Leasehold Property) Bill

Bob Seely Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 10th March 2020 Commons Chamber

[Chi Onwurah]

I have to say that I do not remember reading the Rifkind report, which suggests that it did not make a significant impression, as it was my job to look at the management of the network. The hon. and right hon. Gentlemen on the Conservative Benches—there are many of them—are trying to accuse the last Labour Government of neglecting in some way our telecoms infrastructure, but it is totally clear that, over the 10 years of the last Labour Government, we rolled out broadband infrastructure to 50% of this country. If that is neglect, we would like to see a little bit more neglect like that at the moment.

[Bob Seely (Isle of Wight) (Con)]

rose—

[Chi Onwurah]

I wish to make some progress, but I will be happy to give way in a while.

What the Prime Minister promised was full fibre by 2025. Then he downgraded that pledge to universal “gigabit-capable” broadband, and then, in the Queen’s Speech, the pledge was watered down further to “accelerating the roll-out” of gigabit-capable broadband. I am pleased that, in this Bill, the Government appear to be acknowledging the limitations of a market free-for-all and now propose a number of minor measures to ease infrastructure build-out by giving operators more power to access apartment blocks when requested by tenants.

This is a mediocre Bill. On Second Reading, the Minister spoke of

“taking the first hammer blow to the barriers preventing the deployment of gigabit connectivity.”—[Official Report, 22 January 2020; Vol. 670, c. 358.]

This is not a hammer; it is not even a toy hammer. It is like one of those sponge hammers that may make you feel better, but actually does nothing at all. This Bill does not go far enough in solving the problems brought about by a wasted decade in which the Tories allowed the re-monopolisation of broadband infrastructure and failed to take advantage of the world-leading position left by the last Labour Government. If the Government genuinely believe in the levelling up of the UK’s broadband, the Prime Minister has to do far, far more than this.

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[Chi Onwurah]

I will just finish addressing the previous point and then come back to my hon. Friend.

The point made by the right hon. Member for Haltemprice and Howden (Mr Davis) regarding the financial viability of the sector as a whole is incredibly important. If players in the sector—operators or vendors—fail, there will be an impact on the network and therefore on our security as it is part of our critical national infrastructure. The Huawei business model appears to be dependent on having really deep pockets, which means that it can undercut other vendors in tender processes.

[Bob Seely]

Will the hon. Member give way?

[Chi Onwurah]

May I just finish this point?

There are two consequences of Huawei undercutting other vendors: market share, and the dependence of operators on Huawei as a vendor. The networks that Huawei offers or builds are genuinely vendor-specific and operator-specific, which increases dependence hugely. I recognise the point made by the right hon. Member for Haltemprice and Howden, and I think it is important for national security as well as for our economic security.

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[Dr Liam Fox (North Somerset) (Con)]

It is essential in this debate that we do not conflate the issues of trade and security. In order to achieve greater trade with China we do not need to sacrifice our national security by including Huawei.

I worked hard as Trade Secretary to improve our trade with China, and getting better Chinese trade is good, not least for bringing millions—billions—of people out of poverty in that country. That is in itself a good thing, but—and it comes with a very large but—it must, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, come with a rules-based system.

We know that there is an incredible lack of transparency in China about what is in the state sector and what is in the private sector, and Huawei is a classic example of that. The distinctions that we accept in the free-market west are not accepted in the Chinese system, which is why, for example, it is so able to get around some of the pricing constraints that we put in tenders. It is very unclear how investment is funded. While competitors to Huawei such as Samsung have to make very clear to their shareholders how investment is raised and then spent, that transparency does not exist when it comes to Huawei. When I spoke to Samsung about this issue and asked why it was not at the forefront in countries such as the United Kingdom, its answer was, “Well, we have to invest along with the international rules and we have to account to our shareholders and to the law.” These are not things that apply to Huawei, and in any case the way that the tenders were constructed allows a company that lacks transparency such as Huawei always to underbid. If I wanted to get into someone else’s national infrastructure, and I was able to count on ghost state funding to do so, I would certainly take that opportunity. Why would we be surprised that that happens with Huawei?

[Bob Seely]

Between 6% and 7% of our overseas export trade is with China, and we are worried about offending it. One third of the Australians’ export trade goes to China. China would therefore have the power to cripple Australian export trade if it chose another supplier for some of those products, but it does not do so, and Australia has said no and ruled out high-risk vendors in its 5G. So the economic risks and the economic threats are much exaggerated.

[Dr Fox]

Not only are they greatly exaggerated, it is utterly untrue that there is a link between the two. My hon. Friend has made the case perfectly clearly that the Chinese knew that the Australians were ruling out Huawei involvement yet they still trade with Australia, so the argument in this debate is a red herring entirely. This is an issue about national security. Also, in terms of trading and China, we have not yet resolved issues such as dumping, illegal subsidy and intellectual property theft—and that is before we take into account the 2017 national intelligence law.

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[Bob Seely]

I have talked with the NSC and GCHQ people a few times since last summer. One of the most disturbing things I found out, I found out yesterday. I said, “You are making a pledge that you can militate against the system”—we know from the oversight board that actually they cannot—“but for how long is that guaranteed?” I was told that the guarantee that we can defend the system lasts about seven years, which is about the same length of time as a car warrantee—not 10 years, not 20 years, not three or four generations, but seven years.

[Mr David Davis]

My hon. Friend makes a very good point, but I suspect that seven years is a massive overestimate. Like our telephones, this technology changes every 18 months. Seven years is the achievement of an Einstein of this sector. That is point No. 1: our expert argument in the UK is that we are the only ones in step. That is not an argument that stands up very often.

My second point, to which my right hon. Friend the Member for North Somerset (Dr Fox) referred earlier, is that this is a national security issue. The most recent debates on national security in this House in the past decade or so have been about terrorism, rather than potential massive conflicts between major powers. The House will remember that the IRA always used to say that we have to be lucky all the time, but they had to be lucky only once. That is a demonstration of the sort of analysis we must apply to security issues. Let us consider the Government’s argument. Let us imagine that the Government are right and we are wrong, but we do what we want to do. The worst case is that we spend a little more money and we introduce a technology, possibly better technology, maybe a year or two later. That is the worst-case outcome for our analysis. But if we are right and they are wrong, and we do what they say, the outcome will be to allow the undermining of our complete national infrastructure. This is not just a telecoms system; it is fundamental to the lifeblood of our entire national infrastructure. On a security analysis approach, it is just plum wrong.

Finally—this is designed to help the Secretary of State—there is the argument about time. I confess that I probably take the hardest line in our group on timing. My view is simple: we should separate this into two pieces. One is what happens about new installations. In my view, since they are called high risk vendors—the clue is in the name—there should be no more installations. I can see no loss in not installing another single piece of Huawei equipment. The argument that it cannot be done by anybody else has been proven by several speakers so far to be completely without foundation. My argument to the Secretary of State is that when he stands up, he must tell us whether his proposal involves continuing to put in place Huawei kit that we will then have to take out in our move to zero. On that basis, I am afraid it is very clear that the Back Benchers are right and the Government are wrong.

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[Oliver Dowden]

We have made at least three new commitments today. First, we will bring back the telecoms security Bill by the summer, which will enable the House—[Interruption.] The hon. Lady repeatedly challenged me over when the Bill would be brought back. We have said when we will bring it back for the House to debate. In the announcement from the National Security Council —from the Government—we said we wanted to diversify away from the 35% cap over time. For the first time, we are now setting out the process by which we will work with our Five Eyes and other partners to develop the new supply chain capacity to enable us to do that, and we have set a timetable for doing it within this Parliament. Finally, we have also said for the first time that we will allow much greater scrutiny by allowing the National Cyber Security Centre to—

[Bob Seely]

Will my right hon. Friend give way?

[Oliver Dowden]

I will.

[Bob Seely]

I understand that the Secretary of State and his Front-Bench team are trying to make sense of a bad situation, but he is not saying what point B is. He says we will “diversify away”. Are we doing that because it will give us a bit more leverage with China, or are we diversifying to the point of 0% high-risk vendors, and if so by what date?

[Oliver Dowden]

The Government—I think we all share this objective—would like to get to the point where we do not need any high-risk vendors at all, and we are setting out that process. That said, I want to be candid with hon. Members: I am not today repeating the words of the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the hon. Member for Boston and Skegness (Matt Warman), lest they be misunderstood. We are not today setting out a timetable or date to get to a point where we do not have to rely upon them at all. When we introduce the telecoms security Bill before the summer, hon. Members will have the opportunity to debate this further.

I will make a little more progress and turn my attention to amendment 2. The issue of who is able to request a service from an operator is something that we were conscious of when we were drafting the Bill. As drafted, the Bill, particularly the term “lessee in occupation”, refers to a person who occupies a property under the terms of a lease. For the avoidance of any doubt, this could include assured shorthold tenancy or assured tenancy agreements. It is these types of tenancy agreements that I believe the shadow Minister is seeking to ensure are captured by the Bill, so we will not be supporting that amendment. My concern is that to expand the definition of persons who can make the service request would be disproportionate and potentially undermine a key policy aim of the Bill, which is for operators and landowners to reach agreements between themselves.

The Bill also reflects the fact that the evidence we have received does not suggest that the policy needs to be expanded. I am sure Members will agree that this is a sensible approach that maintains a healthy balance between all parties involved. I hope this clarifies who is likely to be a lessee in occupation and that this satisfies the shadow Minister.

I turn now to my concerns about amendment 3. The Bill aims to support leaseholders to gain access to broadband services from the providers they want. As drafted, the Bill already ensures leaseholders are not locked into services provided by a single provider. Nothing in the Bill prevents a lessee in occupation with an existing gigabit-capable connection from requesting a new service from another alternative provider. That alternative provider will need to give notices to the landowner in line with the electronic communications code. Should that landowner repeatedly fail to respond, that provider could apply for a part 4A order of its own in order to deliver that service. The Government cannot and should not compel independent, commercial companies to alter the way they choose to deliver their services unless there is evidence that a problem exists. Furthermore, far from improving competition and access to services, the amendment might have the unintended consequence of doing the complete opposite. Much of the cost of connecting premises is in the initial installation.

Finally, let me deal with amendment 6. The new connections provided by operators as a result of the Bill will allow greater efficiency and connectivity for consumers and give them an opportunity to benefit fully from certain services including “smart” or internet-connected products, which are often described as the internet of things. The amendment proposes that any operator exercising a part 4A code right must supply provide written information to new customers in the target premises. That would cover best practice on cyber-security in the use of the network connections that have been provided.

I appreciate the sentiment behind amendment 6, and the Government are committed to ensuring that the UK is one of the safest places to be online, but the amendment would impose an additional and disproportionate burden on operators, who may not be best placed to provide consumers with up-to-date information.

The Government have ambitious plans for the roll-out of greater connectivity throughout the United Kingdom, and I can assure the House that in doing so we will never compromise the safety and security of our telecoms networks. Trust in these networks is vital if we are to encourage the take-up of new technologies that will transform our lives for the better.

I have talked at great length to my right hon. Friend the Member for Chingford and Woodford Green and others about our proposals and their amendments. I understand their genuine concerns about the decision taken by the National Security Council and the Government, which was presented to the House about a month ago. I hope that I have given them some comfort, although I accept that it is not all that they have been seeking. I hope I have at least reassured them that the Government appreciate their concerns, and that we are embarking on a path towards the ideal point that we all want to reach where we will have no high-risk vendors. I also hope that they in turn will appreciate that this is not the end of the process but an opportunity for their concerns to be expressed in the amendment, and that the substantial debate will come when we introduce the telecoms security Bill.

Ahead of that, for several weeks—indeed, a few months—there will be the opportunity for intensive engagement in all these issues, including full access to, and scrutiny of, the National Cyber Security Centre and its representatives. I hope that that will enable the House to make progress, but when the Bill is introduced there will of course be huge opportunities for all Members to table appropriate amendments, and the Government will address each one of them.

--- Later in debate ---

[John Redwood]

I agree. I have supported my right hon. and hon. Friends and I have not wished to bore the House by repeating all their excellent arguments, but of course the fact that the United States of America, Canada, New Zealand and Australia are all of one view does matter. I happen to think they are right, but even if they are wrong, sometimes we have to go along with wrong thoughts by our allies and friends—I know that only too well, trying to live in the Conservative party—in order to make things work. There has to be give and take, and I am sure that any other political party with an honest MP would agree that it has exactly the same issues. Before Labour Members get too conceited, I have to say that I have noticed even more extreme issues in the Labour party. It is important that there is give and take.

I happen to think our allies are right, but I want to stress the wider point that in this vision of a more prosperous Britain, we are going to have more skilled people. That must mean we have a bigger role to play in the technologies of today and tomorrow, and those are surely the crucially important digital and data communications technologies. I repeat my challenge to the Minister. We have heard from people who know about these things that this technology already exists among our allies and in safe countries today, so we have an opportunity to buy from them.

The Government and the commercial sector in the United Kingdom are about to commit enormous resource into putting 5G into our country. This is going to be a massive investment programme, and in this situation, money talks. I have no idea who will win the competitions. I do not have preferred vendors that I want to win the competitions, but I do know that I do not want high-risk vendors winning them. Surely this new Government, wanting to level up and wanting to strengthen technology and training, can use this commercial money and state money to better effect. Let us bring forth those providers now and get rid of those high-risk providers as soon as possible.

[Bob Seely (Isle of Wight) (Con)]

I think we all share some concerns that the Government seemed to be more amenable to moving their position last week than they are this week. At the end of the debate last week, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Boston and Skegness (Matt Warman), who kindly responded to us, said that

“we will work to move towards no involvement of high-risk vendors”—[Official Report, 4 March 2020; Vol. 672, c. 299WH.]

in our system. I am unsure whether the Secretary of State has said the same thing today, and we would all be grateful if he clarified whether that statement made by the Minister is still a live statement or whether he is effectively rowing back from what the Minister said.

I speak in favour of the amendment tabled by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) because I believe that high-risk vendors should not be in our critical national infrastructure. This is for reasons of national security, which have been eloquently put, as well as for a whole host of other reasons, including human rights, data privacy, the rule of law and economic competition—a critical one just mentioned by my right hon. Friend the Member for Wokingham (John Redwood).

One of the most concerning elements of this entire sorry saga has been the litany of questionable claims. One of the problems of being a new Member—I speak in part to the good people behind me—is that we want to trust Ministers and although I hold these Ministers in high regard, I believe they have unfortunately been handed a poisoned chalice. There has been a great deal of misinformation in the past—none of which they are responsible for—but it is worth putting this on record with as many sources as possible, so that we can be absolutely clear what the argument is about.

My right hon. Friend the Member for Chingford and Woodford Green talked about Huawei being a private firm, because that is one of the claims that it has made. Sir Andrew Cahn described Huawei as being

“the John Lewis of China”,

and, frankly, I treat that description with the derision it deserves. The academic Chris Balding has made a study of the ownership structure of Huawei, and he has stated:

“Technically, the firm known as Huawei is Huawei Technologies. Huawei Technologies is 99% owned by Huawei Investment Holdings.”

He went on to say that Huawei Investment Holdings was a vehicle of the Chinese trade unions. Chinese trade unions are a public or mass organisation. Public organisations do not have shareholders. An example of a public organisation in China is the Communist Youth League. So, despite the laughable claims in this country and elsewhere that Huawei is a private company—and it is trying to sue people in France who are claiming the same thing, let it be known—Huawei has the same relationship to the Chinese state as the Communist Youth League.

Can Huawei be safely limited to the periphery of 5G networks? The core versus periphery argument has been well laid out by Opposition Members. The Australian Signals Directorate says that

“the distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network.”

I have been talking to Dr Ian Levy and other good, knowledgeable people from the NCSC. They dispute some of this, and they try to provide technical analysis, while that is not correct. I note what the US Secretary of State, Mike Pompeo says, on the advice of the National Security Agency. He says:

“Because 5G networks are largely software-defined, updates pushed to the network by the manufacturer can radically change how they operate.”

So if a network is run by an untrusted vendor, that vendor can change what the network can do quite easily using software updates.

[Nickie Aiken (Cities of London and Westminster) (Con)]

I absolutely understand my hon. Friend’s concerns. My concern, though, is that we have made promises to this nation in the last general election about the need to improve our gigabit broadband, so how are we going to do that?

[Bob Seely]

The simple answer is that 5G and broadband are entirely different subjects, but I thank my hon. Friend for her question.

We have asked questions about state or industrial espionage issues with Huawei. We have been offered a no-spy agreement by Huawei and China. They promised not to spy on us. The idea that we would ever ask Ericsson for a no-spy agreement is nonsense. What would Ericsson ever want to know? How much IKEA furniture we were buying? So the idea of having to ask for a no-spy agreement is in itself rather dubious.

China has a dreadful reputation for IP theft and cyber-attacks. Just last month, members of the Chinese Liberation Army were indicted in the United States for the Equifax consumer credit hack, in which the personal details of 12.3 million Britons were stolen in addition to those of tens of millions of Americans. In 2015, cyber-attackers from China stole the sensitive personal data of 21.5 million US federal employees. Perhaps they are doing that because they want to buy everyone a birthday present, but somehow I doubt it.

There have been specific scandals in relation to Huawei. The African Union reported that every night between 2012 and 2017, computer systems installed by Huawei sent information from the African Union headquarters to China. As Secretary of State Pompeo says:

“As a matter of Chinese law, the Chinese government can…demand access to data flowing through Huawei…systems.”

Nobody has ever denied that that includes Huawei systems in western states and the United Kingdom. Is there a security risk? Is there an industrial espionage risk? The answer, without doubt, is yes.

The Government repeatedly reassure us that the spooks say it is okay. I respectfully take issue with that, for the following reasons. The proof of the pudding is in the detail, and what politicians say about what they have been told is sometimes not the case.

[Andrew Bridgen]

My hon. Friend has obviously done a great deal of research on this subject. Does the fact that Huawei is offering very generous interest-free credit terms for its equipment set alarm bells ringing? In some cases, it is offering up to 30 years’ interest-free credit for its kit.

[Bob Seely]

My hon. Friend makes a very good point. Huawei seems to have two business models. It either undercuts by 30% to 40%, or it simply supplies 115% of the credit needed to buy an entire system. Either way, it undercuts and drives others out of business. I look forward to addressing that point in a moment.

The true voice of GCHQ, without the spin, is found in the Huawei oversight reports, which have become increasingly disturbing. I repeat: we hear the true voice of GCHQ not in the words of Ministers, but in those of the Huawei oversight board. For any colleagues who wish to access the details, if they join our WhatsApp group, which has well over 40 members, I will happily pass them on.

The board found that it could

“only provide limited assurance that all risks to UK national security from Huawei’s involvement in the UK’s critical networks can be sufficiently mitigated”

over time. In other words, the board is saying, “We can no longer give assurance.” This is the board speaking—it is not political spin. It added that, “as reported in 2018”, its work

“has continued to identify concerning issues in Huawei’s approach to software development…No material progress has been made on the issues raised in the previous 2018 report”.

It also stated:

“The Oversight Board advises that it will be difficult to appropriately risk-manage future products in the context of UK deployments, until the underlying defects in Huawei’s software engineering and”—

critically—

“cyber security processes are remediated

At present, the Oversight Board has not yet seen anything to give it confidence in Huawei’s capacity to successfully complete the elements of its transformation programme”.

If I received that as a bill of health, I would be extremely worried. That is the true voice of GCHQ.

[Damian Collins (Folkestone and Hythe) (Con)]

My hon. Friend makes a very important point. A lot of this is about trust: who do we trust? Given that the oversight board has identified cyber-security risks in Huawei’s system and that it has no credible plan to put them right, why should we trust such an organisation and give it yet more work?

[Bob Seely]

My hon. Friend makes an excellent point. If Huawei was bending over backwards to fix its system, all credit to it—but it is not doing that. It is building a flawed system. After eight years, I have been informed that we still do not know whether the source codes that Huawei gives us are the same as those in the system it is establishing. That should cause concern.

Are the security services content? In the report we wrote last summer, Sir Richard Dearlove said that it was “deeply worrying” and

“a risk…we simply do not need to take”.

There are three additional factors that I am concerned about. First, Cheltenham was given a very narrow remit. It was not asked to give Huawei a clean bill of health or, “What do you think in a perfect world?” Cheltenham was given a specific, narrow, technical question. It did not go near the politics of fair and free trade and espionage. Secondly, and probably most worrying—

[Siobhan Baillie (Stroud) (Con)]

If broadband and 5G are separate, why is this amendment being pushed today? This debate is about broadband and we stood on commitments made by the Prime Minister during the election.

[Bob Seely]

That is a very good question and I thank my hon. Friend for asking it. The simple answer is that I have been asking for a Government debate since last summer, but unfortunately they have not seen it fit to have a debate in Government time on one of the most critical issues that we will face in coming decades. My hon. Friend will have to ask the Government why they do not want a debate in Government time on one of the most important issues of the day.

[Tim Loughton (East Worthing and Shoreham) (Con)]

My hon. Friend is making a very good case. Does not this come down to two main points? Do we trust the assurances given by a company that clearly will do what the Chinese Government tell it to do, or do we pay heed to the warnings of four of our major allies, which have taken the decision not to go down this route? Secondly, in such an important infrastructure project, where else would we accept a cut-price offer from a company in a nation that has littered the coasts of east Africa with infrastructure projects that have failed? We do not even know whether this will work properly, and the cost of picking up the bill—of picking up the pieces—when it goes wrong could be huge.

[Bob Seely]

I thank my hon. Friend for his considerable eloquence. He sums up the issue very well.

On my second, and most revealing, security concern, when we ask members of GCHQ or the NSCS how long the guarantee is for—will it last 20, 30 or 40 years? —the answer is seven years. The oversight report has already stated that Huawei cannot provide a guarantee, but, technically speaking, the assurance accompanying the Huawei kit lasts the same amount of time as a car warranty. This technology will define the next 20, 30, 40 and 50 years, and GCHQ says, “We think we’ve got it covered for about seven.”

Thirdly, as I have said, the true voice of GCHQ is in the oversight reports. I am sorry to spend time on that point, but it is important because so many colleagues will be influenced by those saying, “Oh, GCHQ says it’s okay.” If they read between the lines and read the oversight report, they will see that this is not okay.

[Craig Mackinlay (South Thanet) (Con)]

My hon. Friend makes the point about the seven-year cycle. If this goes ahead, are we committing ourselves to Huawei being the dominant force in this industry? We have had 3G and 4G, we are now on to 5G, and there will doubtless be 6G and 7G in time to come, but there will be no western ability to advance this software in the future because Huawei, through cut-price credit deals, will have crowded out the competition in perpetuity. That has to be dangerous.

--- Later in debate ---

[Bob Seely]

My hon. Friend makes an extremely good point, which I will come to. Does Huawei enable a multiplayer market? No, it does not. It probably destroys a multiplayer market, for the reasons given.

Huawei is becoming the vehicle by which China, through peaceful means, seeks to have considerable leverage in the critical national infrastructure of not only the United Kingdom but of any other western nations that are foolish and unwise enough to agree to let in a “high-risk vendor”, to use the Government’s own definition. In the next 10 to 20 years, the remaining western players will be put out of business, and, as my hon. Friend says, our 6G and 7G will be dependent on a country that we do not know we can trust and whose economic players are, by our own Government’s definition, “high-risk vendors”.

Huawei’s credit line is to the tune of $100 billion—that sounds a bit like Austin Powers. It can simply undercut anything that anybody else offers, to aggressively stay in the market. That, combined with its intense lobbying operation in this country, including John Suffolk, Andrew Cahn and others, puts it at an advantage to drive other people out of business.

Are there alternatives? Yes. Orange in France is building a 5G network with Ericsson and Nokia. In this country, O₂ does not yet use Huawei. If the Secretary of State would be interested in saying anything on the emergency services network, we would be very interested in hearing that, because we do not think that the emergency services network should have a high-risk vendor in it. The US, Vietnam, South Korea, Japan and Australia are planning or building 5G networks.

Why has all this happened? This sorry state was reported in Sir Malcolm Rifkind’s Intelligence and Security Committee report in 2013. He found a miserable set of circumstances in which Government officials or civil servants had allowed Huawei into the system without telling Ministers. When Ministers found out that Huawei was in the system, they did not do anything about it. That, combined with an extensive lobbying operation and cut-price deals, has driven Huawei into its position in the market now.

What should we do? Well, let us have a debate—I hope that this is the beginning of one—as Australia and other countries have. I believe that, working with our Five Eyes and other partners—NATO and the European Union—we should lead. There is an opportunity now for the Secretary of State and Ministers to lead on this debate and to agree a common formula for a trusted vendor status, so we know that the people in our system are competent and safe. My right hon. and hon. Friends have made various points about the wider issue of the cleanliness of that—primary contractors are one thing, but if they are buying kit from China, the question is whether that is compromised, and it may well be. We need to find a way to organise the security of our audit process for 5G. We also have to agree a trusted vendor status when it comes to the Bill that will be put before us in June, and I look forward very much to the Government doing so.

[Mr Paterson]

I shall be brief. I begin by thanking the Secretary of State and the Under-Secretary for their great courtesy and the huge attention they have given to several of us to try to find a resolution, because unfortunately some of us find the Government’s position incomprehensible. They had a good narrative: they could have said, “We have inherited a very bad position from preceding Conservative and Labour Governments. We would like to reduce the current position, where we have a high-risk vendor implanted in our 4G and other networks, to zero over a period of time.” That would be a perfectly logical plan, and we are tantalisingly close to the Government saying that. They have acknowledged that Huawei is high risk. Having a limit of 35% is a bit of a nonsense: it is like saying prisoners are allowed to build 35% of a prison wall. If 35% is a risk, and we cannot go above 35%, the obvious, ineluctable conclusion is that we should go to zero over a period of time.

We know that the talk of lack of alternatives is a nonsense—we have been through this. We know Samsung is supplying Korea; we know France has gone for others; the United States has gone for Ericsson; and Australia, with a huge dependence on Chinese exports, has gone for other vendors. We know there are other vendors, so that is all a nonsense.

We know there is a real risk. It is worth looking at the National Cyber Security Centre report. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) quoted two lines from paragraph 5.5.2. I just want to quote one sentence:

“Any national dependence on a high risk vendor would present a significant national security risk.”

Having had the honour of serving on the National Security Council as Secretary of State for Northern Ireland, I know that we must take that as the absolute first priority. I take the House back to the words of the Under-Secretary last week. He made it very clear:

“I conclude by saying simply that national security will always be at the top of our priorities and we will work to move towards no involvement of high-risk vendors.”—[Official Report, 4 March 2020; Vol. 672, c. 299WH.]

That was the Government’s position last week, and I am happy to support that position. What we need to have today is confirmation of how we get there.

The Secretary of State has moved a long way since the National Security Council. We will have a telecoms Bill in early summer. We will have a process with our Five Eyes partners, as proposed by the senators’ letter, which we all received last week. That is all thoroughly good stuff. All we need now is a commitment to say there will be an end date. We have to have from this debate a statement from the Government that there will be a point, in the reasonably near future, where there will be zero involvement of high-risk vendors. The briefing we had sent round to us this afternoon said that

“our intention is to further reduce the market share of high risk vendors so that we get to a position where we do not have to use a high risk vendor in our telecoms network.”

The Secretary of State said that we wanted to be a in a position where we do not have to use them at all, but that is where we are this afternoon. Nobody has to use this equipment: they are just driven to do so by commercial pressures, and it is only by doing what the United States, Australia, Japan and South Korea have done, which is to block and stop high-risk vendors, that we will allow other vendors to grow, to prosper and to supply.

I am delighted to see the Under-Secretary back in his seat and talking to the Secretary of State. They have time still to intervene on me and give a clear commitment that when the telecoms Bill comes through in the summer, it will contain a definitive commitment to a firm date by which all high-risk vendors will have been removed from our system.

Huawei and 5G

Bob Seely Excerpts

Wednesday 4th March 2020 Westminster Hall

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I beg to move,

That this House has considered the security implications of including Huawei in 5G.

It is a pleasure to serve under your chairmanship, Mr Paisley. I am pleased to see so that many right hon. and hon. Members want to speak, so I will be as brief as possible.

The Government’s decision to go ahead with Huawei in the 5G network in the UK—it is clear from the evidence—has angered our allies and perplexed many of us who see this as an avoidable risk. In the rush—I believe it is a rush—to go ahead with the 5G system for the UK using Huawei’s products extensively, the UK Government have brushed aside the concerns of all our most important allies and the people we generally rely on. There is an overwhelming body of evidence indicating that Huawei is an untrusted vendor, which should not be given any further opportunity of access to our most vital communication networks.

The decision of the UK Government leaves us, at the moment, utterly friendless among our allies. After all, Huawei is effectively a state-owned corporation in the People’s Republic of China under the Communist party. Huawei Technologies is 99%-owned by Huawei Investment & Holding, which in turn is completely owned by Huawei Investment & Holding’s trade union committee. According to Chinese law, trade union committees are classified as public or mass organisations, which do not have shareholders, as they are recognised under Chinese law as legal persons or entities in their own right. An example of a public organisation would be the Communist Youth League.

[Bob Seely (Isle of Wight) (Con)]

The relationship between Huawei and the state is the same as the Communist Youth League to the state. Therefore, is it not baffling that the Government continue to argue that Huawei is a private company, given that, by the western definition, that cannot be said in any meaningful sense?

[Sir Iain Duncan Smith]

I agree. That is exactly the point I was making.

--- Later in debate ---

[Bob Seely (Isle of Wight) (Con)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on securing the debate. In the four minutes that I have I shall go through some of the important points that have not been covered. Huawei is a high-risk vendor and should not be in our critical national infrastructure. That is the first significant mistake that this Government have made. How bad and how serious it becomes will be obvious in time. I want to cover not only national security, which my right hon. Friend has eloquently spoken about, but data privacy, our values, our alliances, and, critically, other issues around the competence of Huawei, and fair trade and economics.

I still do not understand why the Government continue to claim that Huawei is a private firm. The point has been made already that it is 99% owned by Chinese trade unions, so will the Minister explain why he and previous Ministers—certainly previous Ministers—have argued that Huawei is a private firm when to all intents and purposes it is part and parcel of the Chinese state? The Government claim that Huawei can be safely limited to the periphery of a network. Most experts and many security agencies say not. I quote Mike Burgess, head of Australia’s version of GCHQ:

“The distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network.”

Will the Minister comment on that? One of Mike Burgess’s senior directors, Simeon Gilding, tried to design a system that could have a high-risk vendor in Australia’s five G network. He failed and said it was not possible. He said that the British

“think they can manage the risk but we don’t think that is plausible given Huawei would be subject to direction from hostile intelligence services.”

Again, will the Minister comment on that? Are there espionage issues with Huawei? They are multiple. Chinese national intelligence law states that citizens have to co-operate. Furthermore, it states that the information that Huawei gets from the UK is the property of the Chinese state. Again, will the Minister comment?

China has a dreadful reputation for cyber-attacks. Chinese People’s Liberation Army soldiers have been charged with the 2017 cyber-security security attack on Equifax, which included data on millions of Britons. Why does the Minister think the Chinese want to collect so much information on so many millions of people in the west? That applies not only to Britons, but the 21.5 million files they stole on US federal employees in 2015. Can the Huawei Cell offer reassurances? Not really. It states that the Cell

“can only provide limited assurance that all risks to UK national security from Huawei's involvement...can be sufficiently mitigated”.

It complained that no material progress was being made by Huawei on the concerns of 2018, and it continued to identify security issues. Are there other security issues? Yes, for sure there are. I quote Finite State, a respected US company:

“Huawei devices quantitatively pose a high risk to their users.. In virtually all categories we studied, we found Huawei devices to be less secure.”

Bloomberg reported that Vodafone in several countries found illicit backdoors on Huawei technology. In March 2019, Microsoft uncovered Huawei MateBook systems running a system whereby unauthorised people could create super-user privileges. There are significant industrial espionage issues with Huawei. Will the Minister comment on those?

We know about Huawei’s involvement in China’s human rights abuses. It works closely with the state in Xinjiang province. Indeed, it boasts about it. In this country, it is a private company. In China, it is part and parcel of the state apparatus. I would love a comment from the Minister. Huawei claims it is a market leader. According to Chris Balding, an academic who studies Huawei, it is not. It is ranked fourth to sixth globally. It has a $100 billion credit line from the China Development Bank, which means that, apart from any other questionable business practices it has—we have been told of quite a few—it can undercut by 30% to 50% any other vendor. By allowing Huawei in the system, we effectively allow data privacy issues, damage to our alliances, and damage to free trade. We do western companies out of business so that we will have to become reliant in due course on China’s 5G as part of a significant power play in our critical national infrastructure.

--- Later in debate ---

[Ruth Edwards (Rushcliffe) (Con)]

I start by declaring an interest: I used to work for BT’s cyber-security team before I was elected. I have spent 10 years working in the cyber-security industry, and I refer the House to my entry in the Register of Members’ Financial Interests.

The security of our telecoms network is vital as we move towards an ever more connected society and economy. It does not, however, rest on the presence or absence of equipment from any single supplier. Strong cyber-security for any system, including our telecoms networks, is determined by: the security architecture principles that have been followed in its design; how the system is managed in-life, including the security controls and monitoring around it; the contingency planning that has taken place, which enables any risks that materialise to be dealt with effectively; and the testing of that contingency planning.

I will address each of those briefly, but the key thing I wish to emphasise is that there is no risk-free option. Regardless of the equipment used, our telecoms networks, Government bodies, businesses and critical national infrastructure operators will always be targets for nation states, aggressors, criminals and hackers. The key thing is to manage the risk and reduce it to an acceptable level. That is what, in my view, the telecoms security requirements achieve.

[Bob Seely]

I am sorry to interrupt; I know that time is short. Is my hon. Friend saying that there is no implication for 5G security, never mind the geopolitics and politics, of having a high-risk, untrusted vendor from a potentially adversarial state in the system? Is it not like giving the burglar the keys to our house, while pretending that we have a safe that is safe?

[Ruth Edwards]

For a start, there are no trusted vendors. Most companies operate a zero-trust policy when it comes to all cyber-security vendors. Secondly, the key point is how we manage that risk. I will go on to answer the question in a bit more detail, if my hon. Friend will bear with me.

The TSRs establish a baseline for security in telecoms, and put it on a statutory footing. They prohibit the use of high-risk vendors in sensitive functions of the network, and cap the use of such vendors at 35% across the network as a whole. As a result of their implementation, we will have some of the most secure networks in the world. The TSRs provide a clear and exhaustive list of sensitive functions related to the control, orchestration and virtualisation of our networks where high-risk vendors cannot be used. They will not be used in the intelligence or control planes of the network, and therefore will not interact with customer traffic in a detailed manner. Any impact of failure will also have a limited, localised geographical reach.

Many understandable concerns have been raised that moving to 5G networks will somehow merge those sensitive functions, often referred to as core functions, with less sensitive parts of the network in which equipment from high-risk vendors will be used. Moving to 5G network technologies could enable us to move sensitive functions out to the edge of the network, but “could” does not mean “should”. Were we to do so, using a high-risk vendor would be the least of our problems.

The further restrictions of only one high-risk vendor in the network and the hard cap of 35% further enhance the security standards. Security architecture principles are not a desperate measure to enable us to use a high-risk vendor; they are part of every network deployment everywhere, whether it is a telecoms network at national level or a business network at company level. More sensitive information and functions with higher risk are treated differently from those with lower risk. A blanket approach of doing away with all higher-risk vendors or technologies would mean that we could not use emerging technologies that offer so much benefit when deployed appropriately.

Today’s motion specifically references Huawei. The UK has globally leading insight into Huawei’s operations, processes and products through the Government-chaired Huawei cyber-security evaluation centre. Whoever the vendor is, any responsible telecoms provider will fully test all hardware and software before deploying it into their networks.

[Bob Seely]

Is that not the problem? So much of our kit is not being tested, which is why we need a fuller security audit. Also, the Cell is becoming increasingly concerned about Huawei, saying that Huawei is not delivering the improvements that the Cell needs. The Cell highlights those concerns in its reports.

[Ruth Edwards]

I thank my hon. Friend for that point. There are engineering problems in Huawei, and the Government and many UK customers have been very clear that they want Huawei to solve them. The news that I must give him is that if he started looking at the code of any supplier, he would see security issues. In security engineering, I am afraid that people make mistakes when it comes to software.

Equipment and performance is monitored in-life by telcos, and threat hunting is carried out across the whole network. Technologies are increasingly powered by artificial intelligence. AI look for anomalies of behaviour both inside the network, in terms of patterns of incoming traffic, and suspicious outbound traffic. Attempts to sabotage equipment or exfiltrate data at scale will be detected.

The National Cyber Security Centre, my former employer BT and many other telcos have all been very clear that they have not previously detected attempts at malicious activity by Huawei. If they had, they would hardly be doing business with them for their 5G networks. However, we cannot rely on the past to determine the future. That is why the cap on the amount of equipment provided by one supplier is so important, as it stops an over-reliance on one supplier in the network. Other arrangements, such as the escrow of source code, enable providers to isolate equipment in their networks and take over full operation of it, should that be deemed necessary due to mounting international tensions.

--- Later in debate ---

[Bob Seely]

Does my right hon. and learned Friend accept that the diversity argument is one of many flawed arguments, because Huawei is undermining diversity? Through Huawei and ZTE, the Chinese state is trying to build up other states’ dependency on it to provide advanced communications, so by getting Huawei in, we are undermining diversity in the market.

[Jeremy Wright]

I agree with my hon. Friend that it is sensible to make sure we do not undermine diversity through our own actions. However, as a matter of principle, taking suppliers out of the system does not assist diversity. The points he has made are substantially about security, and I agree that this debate must focus on that question. Whether we use market caps or bring along other suppliers in the market, diversity is a legitimate security objective, just as it is a legitimate economic objective. However, I am afraid that we do not have the luxury of inventing a domestic contributor to this market in a short space of time, so we have to deal with the market as it is.

There is a good reason why we focus on the security of the system as a whole and not on one supplier. If we are worried about China, as it is perfectly right for us to be, it is worth keeping in mind the fact that many of the competitor suppliers referred to in this debate use Chinese components in their equipment, or assemble their equipment in China. It is therefore important to recognise China’s potential to intervene.

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[John Nicolson]

No, I would not put faith in them, not least because there is little consensus among former heads of intelligence about the issue.

[Bob Seely]

Will the hon. Gentleman give way on that point?

[John Nicolson]

I will not; I will make progress.

The UK has spent, and continues to spend, billions of pounds on the development, maintenance and renewal of 20th-century defence systems, such as Trident, that are simply not fit to face the security challenges of the modern era. The biggest threats we now face—terrorism, climate change and, of course, cyber-security—will not be deterred by multibillion-pound nuclear weapons in the firth of Clyde.

In the meantime, our telecoms infrastructure security has been left weak and exposed by decades of under-investment. Countering the threat would require serious investment in, and protection of, our native companies, which would involve a hard look at China’s enthusiasm for the acquisition of small engineering firms. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) asked who has been asleep at the watch, but we all know which Government and which party has been in charge for the last decade. With China aiming to monopolise the market, it is not too late for the Government and the country to wake up.

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[Tom Tugendhat]

Will the Minister give way?

[Bob Seely]

Will the Minister give way?

--- Later in debate ---

[Matt Warman]

Our aim is not to be reliant on high-risk vendors at all. I appreciate that my right hon. Friend would like me to set out a timetable for that, but I cannot do that today.

There are major market problems we need to address and they are common to all western nations. We have to remain hard-headed and evidence-based. We want to ensure that, as new technologies develop, we have a vibrant and diverse ecosystem of suppliers that we can rely on. The decisions we have made in this area are the right ones because they are based on hard evidence.

[Bob Seely]

We are not getting at the Minister, who we hold in high regard, but at the decision that he is, unfortunately, having to defend. He is now talking about the economics. The problem is that because Huawei is so bankrolled by the Chinese state, it can simply undercut other providers. Even if Fujitsu and Samsung—not to mention UK companies—want to come into the market, so that there is a diverse, multiplayer, western market in 5G, it is very difficult to get to that because Huawei will always undercut, and telcos are heavily indebted and therefore will do Huawei’s bidding. That is a structural problem.

[Matt Warman]

I will come on to what we will do to try to promote market diversification in a moment. Suffice it to say, we do not and will never put anything other than national security at the very top of our agenda on this issue.

[Matt Warman]

Yes. Huawei and ZTE are both high-risk vendors, as we have said previously.

[Bob Seely]

Will the Minister give way?

[Matt Warman]

I fear making no progress at all if I keep giving way.

Put simply, in the view of the most expert telecommunications specialists in the world, as others have said in the debate, a limited amount of carefully controlled hardware from China does not compromise our national security. This Government will continue to do all it can to put the experts who hold that view, both private and public sector, at the disposal of this House. I am grateful to all those hon. Members who have taken up the opportunities for such briefings and I wish they were greater in number. The Government are confident that we are putting the nation’s interests first.

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[Matt Warman]

I hope my right hon. Friend takes significant comfort from what I have said: we want to get to a position where we are not reliant at all on high-risk vendors.

We have confidence in the independent technical assessment from our security experts and, importantly, the telecommunications industry has confidence in those assessments, too. That is why we have been in a position to publish as much of our security assessment as we have done. As a result, we have the most detailed study of what is needed to protect 5G networks anywhere in the world. We are not naive about Huawei or its relationship with the Chinese state. Since Huawei has entered the UK network, it has been carefully managed. Through the cyber-security evaluation centre and the oversight board, we have the greatest access to, and insight on, Huawei equipment anywhere in the world.

[Bob Seely]

I am grateful to the Minister for giving way yet again.

Does he understand that many of us take issue with what he has just said? First, figures from the security world who have publicly spoken up, such as Richard Dearlove, are hostile to what the Minister says. There is a sense that the Government have given our security agencies a fait accompli, because almost all our allies’ cyber-security agencies take a diametrically opposed view to the one that he presents. Secondly, will he acknowledge that the Banbury Cell now has very serious concerns about Huawei?

[Matt Warman]

As I said, we are introducing the new regime because of some of the concerns that my hon. Friend addresses. I reiterate the Government’s offer to put at the disposal of any Member of the House as many experts from the public and private sectors that we can, so that colleagues can be in touch with the latest thinking on this issue.

We understand the threat from China and are robust with it when our interests are challenged. We will continue to publicly call out malicious cyber-activity, and the decision to categorise Huawei as a high-risk vendor took into consideration the potential links between Chinese companies and the Chinese state, including the fact that Chinese companies are subject to China’s national intelligence law. The UK has also been vocal in drawing attention to the systematic human rights violations against Uyghur Muslims and other ethnic minorities in China. The Government have set out our expectations of businesses in the UK national action plan on business and human rights.

The telecoms supply chain review, which was laid before the House in July 2019, underlined the range and nature of the risks, highlighting the risks of dependence on one vendor, faults or vulnerabilities in network equivalence equipment, the back-door threat, and vendors’ administrative access. We need to be alive to the totality of the risks that the telecoms network faces today and will face in the future. High-risk vendors are part of that security risk assessment, but they are not the sole factor.

I want to address some of the myths about how the network will develop. It is true that technical characteristics of 5G create a greater surface area for potential attacks, but it will still be possible to distinguish different parts of the network. As my hon. Friend the Member for Rushcliffe (Ruth Edwards) said, what matters are the critical functions within the network. We need to ensure that critical functions, wherever they are, have appropriate security.

5G Network and Huawei

Bob Seely Excerpts

Monday 27th January 2020 Commons Chamber

[Matt Warman]

I can assure the right hon. Gentleman that this Government will always make decisions in the national interest.

[Bob Seely (Isle of Wight) (Con)]

Why is it argued that we can limit Huawei to the periphery of the network, when Australia and the United States do not agree and when the head of Australia’s cyber-agency says that

“the distinction between core and edge collapses in 5G,”

and that

“a…threat anywhere in the network”

is a threat everywhere? Why is it said that the risks are manageable, when our allies say not? Why have previous Ministers claimed that Huawei is a private firm, when in no way is that true? Why are we told that there are no alternatives, when there are? Why are we told that the quality of Huawei’s work is high, when its Cell in Banbury says that its work is sloppy? Why do we need high-risk vendors in our network at all? Whoever controls 5G will significantly affect our rule of law, our data privacy, our security and our freedom to support our allies. We have had so little parliamentary debate on this issue.

[Matt Warman]

There are a number of questions there. My hon. Friend is right to allude to the fact that there are alternatives to Huawei, and we would of course seek to use them as much as possible. He is right to say that we have to consider the unique nature of a 5G network, and that is precisely what our agencies will do when they offer advice to Government. He is also right to say that we have to look at this decision in the round, and that is what we will do.